Financial crisis facing public education also threatens education reform

By Leo Coco

TCTA’s Washington lobbyist

Calling the impact of the recession on jobs an “education catastrophe,” U.S. Secretary of Education Arne Duncan has urged Congress to approve additional stimulus funds to save jobs in public schools. Duncan warned that the President’s education reform agenda, aimed at turning around low-performing schools and promoting effective teaching, could be threatened by increases in the number of students in classes and reductions in summer school programs as a result of layoffs.

The impact of the crisis on states and local governments is being closely monitored as they are being forced to cut jobs that are critically important to their communities, particularly teachers, firefighters and police. Traditional sources of revenue have been slammed by the recession, and the next school year is looking to be one of the most severe in decades in terms of funding.

Job-relief legislation proposed
In his mid-April testimony before the Senate committee that funds education, Duncan sounded the alarm that dire budget shortfalls facing America’s schools could result in layoffs somewhere between 100,000 and 300,000. He stressed that the impact not only creates major hardships for teachers and their families but has rippling effects throughout the entire economy.

Duncan drew a direct link between the current financial crisis facing public education and how it is undermining the momentum for reform. He urged Congress to consider another round of emergency assistance to America’s schools similar to the aid provided to states through the American Recovery and Reinvestment Act (ARRA). The ARRA included almost $100 billion in education funding for fiscal years 2009 and 2010, but states are concerned about those funds running out at the beginning of a new fiscal year this fall.

On the same day, the chair of that Senate Committee, Iowa Sen. Tom Harkin, introduced the Keep our Educators Working Act, a bill to create a $23 billion “Education Jobs Fund” to help keep “on the job” teachers, principals, librarians and
other school employees whose jobs are threatened by budget shortfalls. Described by Harkin as “an investment in our kids, in our economy, and in our future,” the fund is modeled after the State Fiscal Stabilization Fund (SFSF) that was a major part of the ARRA of 2009.

Currently that fund supports more than 300,000 education jobs, and supporters credit it with diminishing the negative impact of the recession. Critics of the SFSF claim that schools are facing exactly what was predicted, since the ARRA funding was appropriated for only a two-year period. Now that the money is running out, states and local communities are forced to make tough choices to compensate, as well as to deal with shrinking budget realities. The funding in the Harkin bill could be used to retain existing employees and hire new ones or to provide on-the-job training activities for education-related careers.

The U.S. House of Representatives in December 2009 passed a jobs bill that included the same amount of funding to support the retention or creation of education jobs; it also was designed as an extension of the stabilization fund in ARRA. The Senate took no action on that bill. In March, George Miller, chair of the House Education and Labor Committee, introduced a new piece of legislation, the Local Jobs for America Act, aimed at helping local communities create and save one
million jobs. The bill targets states and local communities with the greatest need in providing jobs that are directly related to the restoration of vital local services. Included in this bill is a provision identical to the one passed by the House last year
that would provide $23 billion to help states support 250,000 education jobs.

Crisis confirmed in administrator survey
Fueling a call for immediate action before the start of the new school year were findings in an April 2010 study by the American Association of School Administrators. The study, based on a survey of 435 school administrators from 45 states, reported that over 68% of school administrators cut positions during the current school year and 90% anticipate having to do so in the 2010-11 school year. In 2008-09, 4% indicated furloughs were implemented, and in 2009-10, 12% implemented furloughs. However, 34% of respondents indicated they are considering personnel furloughs in the coming school year.

Finally, compared to 2009-10, almost twice the number of responding school administrators indicated they are considering personnel layoffs for 2010-11. The survey also yielded information on increases in classroom size, and the trend is dramatic: 9% reported increases last school year, 26% this school year and 62% expect increases for 2010-11. More than one-third of respondents are considering eliminating summer school for 2010-11 and more than half indicate plans to cut curricular activities in the next school year.

The study also focused on big picture themes: (1) the ARRA was crucial in helping to prevent severe cuts to education spending; (2) the cutoff of ARRA funds combined with serious budget shortfalls on the state and local levels represent “a one-two punch to education funding” that likely will lead to more layoffs and fewer resources for school programs and personnel; and (3) the new emphasis on competitive grants likely will lead to greater budget instability, will not yield longterm solutions that support education reform efforts, and are unfair to those
school districts that have the greatest funding challenges because they do not have the resources or capacity to compete.

“If we can bail out Wall Street, then we can bail out school children”
It is difficult to predict what will happen. While heading to an economic summit this month, House Speaker Nancy Pelosi commented to the press that “this event is all about a four-letter word - jobs, jobs, jobs, jobs.” As members of Congress spend more time at home this summer in preparation for tough weather ahead with the elections in November, they certainly will hear more about the “four-letter word” and the high national unemployment rate. So while Congress has the political
motivation to take action to pass jobs-relief legislation, there are two other words that will complicate that process: bailouts and deficits.

These politically explosive words already are being used to talk about a provision in these bills that extends the ARRA funding. Supporters of the Miller and Harkin bills argue that if we can bail out Wall Street, then we can bail out school children. However, Sen. Lamar Alexander - one of the most respected members of the Senate with impeccable education credentials both as a former Tennessee governor and U.S. Secretary of Education - recently expressed strong concerns about where $23 billion would come from in a time of soaring federal budget deficits. “I wonder from whose school children we are going to borrow this money because we have a looming debt crisis in this country and we’ll need to debate this,” said Alexander.

That debate will be focused primarily in the Senate, since the House has already passed an identical provision this Congress. And that debate is shaping up as job protection versus paying for the cost of any new program or extension of ARRA.

Leo Coco is TCTA’s lobbyist in Washington, D.C. He is a senior policy advisor with
the law firm of Nelson Mullins Riley & Scarborough and his background includes extensive experience in the U.S. Department of Education.